Australia’s failure to address the shortage of asset managers means it is not getting the best return on its investment in infrastructure, an industry whitepaper argues.
Peak body Institute of Public Works Engineering Australasia released its whitepaper Best Practice Asset Management of Essential Public Infrastructure on Wednesday.
It calls on all levels of government to commit to educational programs that raise the capacity of asset management practice.
“Asset management of public infrastructure is the foundation of resilient communities and their long-term wellbeing,” the white paper said.
“Yet there is a widening gap in Australia between the building of infrastructure and the process of planning which is undermining the optimal service delivery of these assets over the long-term.”
Co-ordinated approach to education needed
This year, there is no co-ordinated national strategy to education and skill development in the asset management profession, according to the whitepaper.
“(This is) an absence which heightens risk around the cost-effective use of public funds and undermines the delivery of quality services to the community.”
One way to address this is for the federal government to fund educational programs to raise capacity and asset management practice, the paper said.
“There should be commitment to an industry wide uplift of skills in Asset Management, which will deliver better value for infrastructure and delivery programs over the short, medium, and long term.”
“There is a widening gap in Australia between the building of infrastructure and the process of planning.”
Challenges to asset management
According to the 2021 National State of the Assets (NSoA) report by the Australian Local Government Association, the estimated cost of replacing local government assets – excluding land and plant and equipment – was $533 billion.
It also found that around 10 per cent of local government assets are in poor condition and require close monitoring, with the estimated cost of replacing these assets to be approximately $51 billion.
Although some local government assets, between 20 per cent and 26 per cent, are in fair condition, these will become more costly to maintain as they age, according to the NSoA report.
What is asset management?
In Australia, a large number of public works infrastructure assets are delivered and managed by the local government sector and members of IPWEA, according to the whitepaper.
“Asset management is recognised internationally as a discipline applied to the management of public works infrastructure and services.
“Good asset management is concerned with the financial, social and environmental sustainability of delivering services to our communities through the provision and management of public infrastructure.”
Asset managers provide insight on the way infrastructure delivers services to communities and considers the current state of existing assets, future renewal and upgrade and maintenance costs.
“Asset Managers consider a ‘whole of life’ view that ensures assets are built to adequately discharge their purpose, are monitored, well maintained, and have an adequate program of renewal and acquisition,” the whitepaper said.
“Asset management is recognised internationally as a discipline applied to the management of public works infrastructure and services.”
Recommendations from IPWEA
To enhance the quality of life of communities, IPWEA makes six recommendations.
Some of these include calling on federal, state and territory governments to reactivate the ‘Local Government Financial Sustainability – Nationally Consistent Frameworks’ to improve asset investment decisions.
IPWEA also wants state and territory governments to audit the long-term financial plan of local governments to ensure alignment with the asset management plan lifecycle forecasts.
Local government should be required to audit and report the state of their infrastructure, with status reports to be provided to the Commonwealth Grants Commission.
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